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Export-Import Policy 2002 - 07
Introduction
The Annual Export-Import (Exim) Policy 2002-07 is notified
by the Central Government on 31st March 2002 has come
into force from 1st April 2002.
The
Salient features of Export-Import Policy 2002-07 are
as under: -
-
General
- All
existing export promotion schemes continue with
few modifications.
- Relocation
of industrial plants from other countries into
India permitted without any import license even
if they are more than 10 years old with the stipulation
that depreciated value of such plants is more
than Rs.50 crores.
-
Special facilities extended to status holders
i.e. Export Houses, Trading Houses, Star Trading
Houses and Super Star Trading Houses.
-
Threshold limit for obtaining "Export House"
status reduced to Rs.5 crores from Rs.15 crores
for Small Scale Industry, tiny sector, cottage
sector, units located in North East States / Sikkim/
J&K; units exporting handloom/ handicraft/
hand knitted carpets/ silk carpets; exporters
exporting to countries in Latin America/ CIS/
Sub Sahara Africa and units having ISO 9000 (Series)
status.
- Status
holders allowed to retain 100% foreign exchange
earnings in EEFC account.
- Special
provisions made for boosting export of products
of cottage as well as handicraft sectors, small-scale
industry, leather, textiles, gems and jewellery,
chemicals and pharmaceuticals.
- Option
given to exporters to convert from one export
promotion scheme to another in case the exporter
is denied the benefit under one scheme.
- Free
import of equipment and other goods used abroad
for more than one year allowed to companies executing
projects in other countries.
- A
new 8-digit commodity classification for imports
introduced, which shall be adopted by Customs
and DGCI&S shortly. This will reduce classification
disputes.
- Advance
Licences
- Advance
license scheme continues but the facility of Annual
Advance License has been withdrawn.
- Issue
of DEEC books and logging by Customs has been dispensed
with. Redemption will be done on the basis of Shipping
Bills and Bank Realisation Certificates.
- Interest
on non-fulfillment of export obligation reduced
from 24% to 15%.
- Advance
Licenses issued up to 31st March, 2002 shall continue
to be governed by the provisions of Handbook Vol.
I of the year 2001-02 which mean that earlier Advance
Licenses would not get the benefit of reduction
in interest rate for non-fulfillment of export obligation
and abolition of DEEC books.
- Value
addition norms for export of plain jewelry has been
reduced from 10% to 7% for issue of REP License.
- Import
of mandatory spares up to 10% of the CIF value of
Advance License have been allowed.
- New
exporters seeking Advance License have to furnish
100% bank guarantee to customs to cover exemption
of customs duties together with 15% interest as
against earlier provision of bank guarantee for
customs duty only.
- To
neutralise the high cost of fuel in India, rebate
for fuel for 13 specified product groups varying
from 3% to 7% of FOB value of exports have been
allowed in Standard Input-Output Norms (SIONs).
- Duty
Free Replenishment Certificates (DFRC).
- Technical
characteristics of imported inputs have been dispensed
with for audit purpose.
- The
minimum value addition of 33% for eligibility of
DFRC continues.
- Verification
of details of exports as given in the DFRC by the
customs before allowing exports continues.
- Duty
Entitlement Passbook Scheme
- DEPB
scheme continues.
- DEPB
rates of almost all items has been reduced considerable.
- Value
cap exemption granted on 429 items on 18th October,
2001 continues.
- There
will be no Present Market Value (PMV) verification
by customs except on specific intelligence.
- DEPB
rate will be same for a product whether exported
at CBU or in CKD/SKD condition.
- In
case of composite items, the DEPB entitlement will
be limited to the lowest rate applicable for any
constituent. This provision will cover all kinds
of blended fabrics.
- 3%
Special DEPB rate announced for export of primary
and processed foods exported in retail packaging
of 1 kg or less.
- DEPB
has been allowed on export of transport vehicles
to Nepal against free foreign exchange. However
on other products exported to Nepal non-eligibility
of DEPB continues.
- Pesticides
formulations will have 65% of the DEPB rate applicable
on such pesticides.
- In
future DEPB rates will be reduced only after due
notice to exporters.
- Export
Promotion Capital Goods (EPCG) Scheme
- A
new provision has been made for EPCG Licenses of
Rs.100 crores or more which will have 12 year export
obligation period with 5 years moratorium period.
Also there will be no export obligation for 5 years
from the date of issue of license.
- Any
firm / company acquiring a unit which is under BIFR
will be allowed 12 years for fulfillment of Export
Obligation to be counted for the date of issue of
license to the BIFR unit.
- Common
service providers to small scale industry in centres
of economic and export excellence like Tirupur,
Panipat, Ludhiana for hoisery, woolen blankets and
woolen knitwear respectively will be eligible for
EPCG scheme.
- Under
the EPCG scheme, cottage sector and handicrafts
units will not be required maintain average level
of exports while calculating the Export Obligation.
- Supplies
under Deemed Exports will be eligible for export
obligation fulfillment and EPCG scheme along with
deemed export benefits.
- Interest
on non-fulfillment of export obligation has been
reduced from 24% to 15%.
- Special
Economic Zone (SEZ)
- To
access working capital loan at internationally competitive
rates, RBI will issue guidelines to permit SEZs
for External Commercial Borrowings (ECBs) for a
period of less than 3 years.
- RBI
will also permit Offshore Banking Units in SEZs.
- In
order to impart security to the returns of units
in SEZ, hedging of commodity price risks will be
permitted provided such transactions are undertaken
by the units on stand - alone basis.
- Electronic
Hardware Technology Parks
- Units
in Electronic Hardware Technology Park (EHTP)
will have no other export obligation except positive
Net Foreign Exchange as Percentage of Exports
(NFEP) in 5 years.
- Supplies
by these units of ITA I items having zero customs
duty in the domestic market will be eligible for
counting of their export obligation.
-
Removal of Export Restrictions
- Export
restriction like registration and packaging requirements
have been removed on butter, wheat, wheat products,
coarse grains groundnut oil and cashew when exported
to Russia under the Rupee Payment Debt Scheme.
- Export
restrictions on cultivated varieties of seeds except
jute and onion have been removed.
Important
Notification
Valuation
of Bulk Supplies of goods covered under MRP Based Assessment
Central
Board of Excise & Customs has issued an important
clarification vide circular No. 625/16/2002-CX dated
28th February (reproduced on page 24) clarifying that
valuation under MRP based assessment with abatement
under Section 4A of the Central Excise Act with abatement
under Section 4A of the Central Excise Act is not applicable
to bulk supplies, supplies to DGS&D and government
departments, supplies to defence canteen stores depots
and few other categories.
Valuation
of such supplies will be governed by Section 4 of Central
Excise Act i.e. based on transaction value.
Manufacturers
may note this important change in valuation.
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